By Sarah Zimmerman
Last year’s economic and industry hardships don’t seem to be letting up in 2008, so retailers are turning to opportunities, such as financing options, to help dealers, excel sales and better business this year. FCNews asked some industry professionals to get specific— what’s out there, who’s offering it, and how can it drive business in ’08?

GE Money

Paul Schlehr, vice president of sales for the flooring industry, GE Money, said consumers have more financing options today than ever before. He said many dealers are surprised to find consumers from across the economic spectrum are eager to use credit when making flooring purchases. “Consumers who know how to utilize credit wisely prefer to take advantage of financing. Credit enables them to get the flooring they want right away with manageable payments and often a promotional term such as deferred interest.”

He said credit offers benefits to both the customer and the retailer. “It provides many benefits to the customer—use of someone else’s money, affordable monthly payments, fast credit decisions, get new flooring faster and greater assurance of quality.” And, he noted credit is a powerful sales and marketing tool when used effectively, pointing out several ideas for driving business— special sales promotions, direct mail, enhance home value and in-store financing signage.

GE allows dealers to choose from several deferred payment promotions, including 90 days, six months, 12 months, 18 months and higher. “We offer a variety of financing options so dealers can choose a plan that will add punch to their marketing efforts in the spring and summer.

Many dealers use sales to stimulate traffic and for certain seasonal items.” He noted trends toward consumer and dealer demand for longer-term promotions have been consistent.

Mohawk Industries

Lisa Ownbey, director of marketing services for Mohawk, said the amount a consumer will spend on a flooring purchase significantly increases when using the Mohawk Credit Card. “The average initial sale ranges between $2,700 and $3,000 versus bank cards or cash average tickets, which both fall below $1,000.”

Mohawk is partnered with GE Money and both continually review consumer trends and update program offerings. “Anyone in the flooring and banking industries can attest to just how tough times are,” Ownbey said. “To help boost sales, we are offering promotional specials and discounted rates. We’re continuously reviewing and adjusting our finance promotions based on feedback from our sales force and retailers.” She noted Mohawk’s Colors of Spring Sale featuring a special financing option as an example.

Ownbey added financing is beneficial for both retailers and consumers. “By being able to purchase more and spread the payments out over a period of time, the consumer is more likely to tackle a larger area or more rooms in her house. Typically we see consumers buying higher-end products with credit.”

Shaw Industries

According to Kay Wiley, Shaw’s financial benefits coordinator, the most popular financing used by retailers through the Shaw/Citi Financial consumer credit program is the 12-month no pay, same as cash. However, the company also offers options extending from 90 days to 60 months.

Wiley agreed financing options offer many benefits for both dealer and consumer, including extended payment options with little or no payments and interest, ability to buy now and pay later and the ability for a consumer to get the flooring she wants rather than what she can afford. She reported Shaw’s credit volume continues to increase despite the challenging market conditions. “During this challenging market, Shaw’s credit options benefit all consumers, allowing those who may be struggling financially to go ahead and make that flooring purchase.” She pointed out this also frees up customers’ MasterCard or Visa lines of credit for emergencies.

Beaulieu

Patricia Flavin, senior vice president of marketing for Beaulieu, said the person using credit to purchase flooring is undoubtedly looking to postpone their payment to a future date, hopefully when they will have more disposable income. “A lot of these prospective buyers are now reassessing the marketplace and have decided to upgrade their present home a little. Many consumers have bank cards that are maxed out or have a low open to buy. Homeowners applying for a private line of credit have some of the best approval rates out there.”

She added that many dealers are starting to embrace offering credit due to the decrease in qualified buyers into the store. “When credit is offered it generally means a larger purchase for the dealer so their average ticket price goes up. This generally means an upgrade that allows the dealer to make more not only on the increased yardage but in higher margins.”

Beaulieu provides a program where retailers get special offers periodically providing interests rate savings.